Insights from the Second Hand Sales Market

Observation on the industry from brand value, consumer behaviour and how second hand markets can disrupt and enhance brands.

Frustrated with the clothes in my wardrobe that don’t suit my lifestyle or taste anymore and having the time to completely ‘Marie Kondo’ my house while decorating, over the last four months I have set about seeing what return I could achieve in the second hand market and learn what is happening in the broader market. In the process I’ve not only streamlined my wardrobe, husband’s wardrobe and the rest of the house, it’s raised questions for me on brand value in this market and what can consumers and businesses do with the rise of the second hand market.

Anyone in the apparel and textile industry who doesn’t have one eye on sustainability at the moment has their head in the sand and is in denial about the future. Not only for impact to the environment but the opportunities addressing sustainability can bring to their businesses. We are starting to see that brands who address sustainability are on track to be more successful according to the BCG Pulse score. One approach to driving the improvement of sustainability in the fashion sector it to address the lifetime of garments and look for ways to extend it instead of going to landfill. In the UK we throw out tons of fabric each year, many are clothes that are less than one year old and on average less that 20% of garment textiles at the moment goes to recycling, the rest often end up in landfill. If we can extend the life of existing garments then we will dramatically start to reduce the impact of fashion on the environment.

Taking the waste of garments going to landfill and combining that with the often cited statistic that we only wear 10% of our wardrobe — that is an even greater proportion of textiles that’s going to waste from not being used. There is therefore a huge opportunity to capitalise on this stock and release its value, and it seems like the tools and attitude to tackle this is starting to happen through new platforms providing a service and marketplace. It was reported only a few weeks ago that the second hand sales market has reached the same scale as fast fashion with more and more consumers starting to move into the second hand clothing market. The same way retailers look at their warehouses, consumers are starting to look at their wardrobes as stocked full of idle cash that could be released and put to a new purpose if the product is not being used.

I had dabbled in the second hand market before but recently had let my old clothes accumulate so decided to put in the effort and see where the second hand market would take me. I started with eBay as it’s the one everyone knows, I’d used it before and could be sure that most of my stock would sell in a week by auction. So far in four months I’ve sold over 200 items, mostly clothing from a mix of brands and high street. These are some of my findings and observations from the experience:

Brands sell quickly. It is much harder to sell fashion items for decent prices.

I have a lot of Rapha product, more than I reasonably need (6 years of allowance and discounts will do that). Virtually all of my stock sold within the week auction period for reasonable prices, usually 20–35% of the initial RRP depending on condition and age. On the other side, fashion items I’ve had from Cos, Office, Asos and French Connection were much slower to sell, often needing to be listed for multiple weeks and typically making a maximum of 5–10% of the initial RRP.

Quality product and classic brands known for quality will always sell well — even when worn out.

I found that the condition nearly didn’t matter with some products. Virtually worn out product by reputable brands would maintain some value and sell well considering. My very tired but still wearable Clarks desert boots sold for £10, a 15 years + very tired old mulberry scarf for £17.

Value and fast fashion brands have low to no value in second hand market.

Whereas brands that are reputable for quality in some way can sell even when heavily worn, fast fashion and high street products can be hard to shift even when virtually new, or they just don’t sell. My sequin French Connection skirt for £110 new only sold for £5, once worn perfect condition Asos shoes for only £2 and some H&M products couldn’t even sell for £1. These types of products only seem to sell in the second hand market if they enter it while full price options are still in the stores. Research shows these are also the types of products most likely to be circulating the second hand market so therefore supply is high which drives down prices and perceived value to customers.

Timing is key for occasion wear.

As with the regular fashion calendar, timing is key when selling seasonal and occasion wear items in the second hand market. Casual clothes sell much more quickly and consistently throughout the whole year. I was too late to list some of my evening and party style products for the winter so many remained unsold. The market is pretty saturated by this category with many other people looking to sell dresses and such worn only one. It’s just my hunch but I think people are less keen on buying second hand for special occasion dressing and are more particular about purchasing the latest styles.

Specialist platforms to sell second hand is a growing business area.

More specialist platforms for fashion are entering the market making it easier for consumers to find specific items from second hand and address the growing market. I discovered Depop in December and so far it has been a better platform to sell fashion and vintage styles and I can hold out with higher prices and wait for the right buyer. The customer is younger making it more suitable for some of my stock and you can curate a shop and build up a following based on your taste. There are also other platforms emerging to address specific customers around the world like the RealReal in the US. Many of them are targeting younger customers at the moment who are more likely to buy second hand but I’m sure in the future there will be new players to specialise for other demographics.

Reflections on my experience.

It’s a very satisfying feeling to be able to make money out of nothing and build a basic business from it. Taking on this challenge aligns with my values that clothes are an investment and if you look after your possessions well and make considered purchases the value in them isn’t lost. While it definitely takes work maintaining the sales, I think I will keep it up and have a one in one out rule for managing my wardrobe. As for future purchases, if I know that I can get at least 20% of what I spend back when I sell the item if I buy better, I am going to think about that more seriously and probably sell items before they have been sitting around unworn for a year or more. When I buy from now on I will have one view on when I might want to pass on my clothes from the start and treat each buy like an investment.

How might the second hand market change consumer behaviour?

All the research I’ve done around this subject points to more and more people buying and selling in the second hand market. With the tools available from place like Depop enabling young people to be able to ‘build an empire from their bedroom’ I think it’s only a matter of time before my experience becomes the norm.

I doubt that many will spend as much time as I have on the process, I think it’s more likely to be a slow change in attitude. People will become more educated on their clothes and begin to see that every item they have has value. Instead of throwing away clothes they will opt to sell things which will then lead to people becoming more comfortable with buying second hand after that.

What can this mean for businesses?

Fast Fashion

I think that the second hand market is going to change fast fashion and value retailers the most and potentially lead to the sector shrinking and taking steps to improve quality and perception of their products.

It’s also possible that the way we make fast fashion clothes will change. We might start to accept that they have virtually no second hand value and a short life cycle. Therefore the fabrics need to be made to actually degrade over a short period or be more recyclable by simplifying the materials used and businesses to encourage their customers to recycle with them. H&M have started to do this but their processes aren’t quite as circular as they could be, not many of the clothes they make are actually all recyclable.

Brands

Monitoring how brands are performing on the second hand market can show how healthy and well regarded a brand is. I use this to get a quick sense if the popularity of a brand is going up or if it is losing its way.

Brands could be set to benefit the most from the second hand market if they start to take ownership of the resale value of their product. From my research and experience it is premium branded product that has the most value in the second hand market but only a handful of brands are active and leading the way in this area at the moment. Patagonia, Eileen Fisher and REI are all at the forefront of this area using Yerdle to set up their own platform — and not incidentally these are brands that have sustainability as a core value. It’s understandable that there aren’t more brands active in the market at the moment — it’s expensive and can be seen as a distraction to the rest of the business. One sector that is setting the standard for second hand sales is the trainer market. This has evolved fairly organically and is on the more extreme side with limited runs achieving prices that far exceed the regular retail price. These sectors and brands really show what will be possible to achieve if you combine brand desirability with valuing the lifetime potential of your product and that businesses can turn reselling product into a sustainable business model too.

What is certain is that the fashion industry does not stay constant and change is starting to happen. Demand is happening in the market and if brands don’t act sooner rather than later there is almost certainly going to be regulation put in place to force brands to take ownership of the end of life of their produce. Wouldn’t it be better to be proactive?